Things to know about electronic invoices

Posted date 31/10/2019

9.399 view

Posted date 31/10/2019

9.399 view

VAT invoice is a type of invoice applied in cases where sellers of goods and service providers declare VAT using the deduction method.

What is an electronic invoice?

Decree 119/2018/ND-CP issued on September 12, 2018, effective from November 1, 2018, stipulates electronic invoices for the sale of goods and provision of services. According to Article 3 of the Decree, “An electronic invoice is an invoice expressed in the form of electronic data created by an organization or individual selling goods or providing services, recording information about the sale of goods or provision of services, digitally signed, and electronically signed according to the provisions of this Decree by electronic means, including cases where invoices are created from cash registers connected to transfer electronic data to tax authorities”.

According to Article 5 of Decree 119, regulations on electronic invoices include:

+ VAT invoice is a type of invoice applied in cases where sellers of goods and service providers declare VAT using the deduction method.

+ Sales invoice applies in cases where sellers of goods and service providers declare VAT using the direct method.

+ Other types of invoices include electronic stamps, electronic tickets, electronic cards, electronic receipts, electronic delivery and transportation notes or electronic documents with other names but with the correct content as prescribed.

Roadmap to apply electronic invoices?

From the effective date of Decree 119/2018/ND-CP on November 1, 2018, the roadmap for applying electronic invoices is as follows:

+ Businesses that are using electronic invoices will continue to use electronic invoices.
+ Businesses that are using paper invoices can continue to use printed invoices, self-printed invoices, and purchased invoices until October 31, 2020.

+ In case from November 1, 2018 to October 31, 2020, the company has used up all the printed invoices according to the invoice issuance notice, if there is a need to continue using them, and it is considered suitable for the actual conditions of the enterprise, it will continue to use the printed invoices until switching to using electronic invoices according to the provisions of the Decree.

+ Enterprises established in the period from November 1, 2018 to October 31, 2020. If the enterprise meets the requirements on information technology infrastructure, it will apply electronic invoices. If it does not meet the requirements, it will still use paper invoices and send Form 03 - Declaration of invoice data, documents of goods and services sold to the tax authority.

From November 1, 2020, all businesses are required to use electronic invoices.

What is the procedure for registering for electronic invoices?

Businesses that want to apply electronic invoices need to follow these steps:

Step 1: Enterprises make a declaration to register/change information on using electronic invoices according to form No. 01 (Appendix issued with Decree 119/ND-CP) and send it to the tax authority.

Step 2: Within 1 working day from the date of receiving the enterprise's declaration, the Tax Authority shall send a notice according to Form No. 02 of the appendix issued with the Decree to the enterprise informing it of its acceptance or non-acceptance of the enterprise's registration to use electronic invoices via the electronic information portal of the General Department of Taxation.

From the time of using electronic invoices with tax authority codes, enterprises must cancel unused paper invoices (if any) according to regulations.

Some things to note

Electronic invoices do not have the concept of linkage; the buyer, seller and tax authority all exploit data on a single electronic invoice.

Individual customers and retail customers who do not need invoices for tax declaration do not need the buyer's signature on the electronic invoice. For business customers who need invoices for tax declaration, the buyer's signature is required.

To serve the purpose of settlement and storage of invoices, the buyer can request the seller to convert the electronic invoice into a paper invoice with full signature and seal.

In case the electronic invoice has been issued to the buyer, but the goods have not been delivered, the services have not been provided, or the buyer and seller have not declared taxes, if an error is discovered, it can only be canceled with the consent and confirmation of both parties. The canceled electronic invoice must be stored for the tax authority to look up. The seller creates a replacement electronic invoice for the incorrect invoice to send to the buyer and the invoice must have the words "this invoice replaces invoice number ..., symbol, sent on month year.

In case the invoice has been created and sent to the buyer, the goods have been delivered, the service has been provided, the buyer and seller have declared taxes, and then errors are discovered, the two parties must draw up a written agreement clearly stating the errors, with both parties' electronic signatures, and at the same time the seller must create an electronic invoice to correct the errors. On the adjusted invoice, clearly state the increase (decrease) in the quantity of goods, the selling price, the VAT rate, the VAT amount for the electronic invoice number... symbol... Based on the adjusted invoice, the buyer and seller shall make an adjusted declaration according to the provisions of the law on tax administration.

Good luck!

MSc. Tran Thi Thuy – Faculty of Accounting

Things to know about electronic invoices

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